Weak International Economic Cooperation In Response to the COVID-19 Crisis
This paper analyzes several of the dimensions of weakening multilateralism in the area of economic cooperation during the COVID-19 crisis. Professor José Antonio Ocampo argues that international cooperation during the COVID-19 crisis has been weaker than during the 2008-09 North Atlantic Financial crisis. This contrasts with the more aggressive domestic economic policies adopted by the developed countries.
The COVID-19 hit the world in the midst of a process of weakening multilateralism. In addition, the world economy has been hit by the deepest and most synchronized recession in world history—a 6.1% reduction of world GDP at market exchange rates according to the most recent IMF projections.
In terms of financial cooperation, the emergency financing facilities of the International Monetary Fund have that been made available to a large number of countries and the capacity of the World Bank to increase its lending stand out as positive steps, but the U.S. veto to an issue of IMF’s Special Drawing Rights and the lack of a call by the G-20 to capitalize multilateral development banks stand out as negative features. The crisis of the World Trade Organization and the tensions that international trade was facing prior to the crisis stand out as the most troublesome features of international economic cooperation.
Finally, the paper argues that some advance has been made in the negotiations of international tax cooperation, but it remains to be seen what the final outcome of those negotiations would be.
About the Author
José Antonio Ocampo
Professor of Professional Practice at Columbia University and former Minister of Finance of Colombia
Jose Antonio Ocampo is a Professor of Professional Practice in the School of International and Public Affairs and former Minister of Finance of Colombia. He is also a Fellow of the Committee on Global Thought at Columbia University. Prior to his appointment at Columbia, Professor Ocampo served as the United Nations Under-Secretary-General for Economic and Social Affairs, and head of UN Department of Economic and Social Affairs (DESA), as Executive Secretary of the UN Economic Commission for Latin America and the Caribbean (ECLAC), and has held a number of high-level posts in the Government of Colombia, including Minister of Finance and Public Credit, Director of the National Planning Department, and Minister of Agriculture . Professor Ocampo is author or editor of over 30 books and has published over 200 scholarly articles on macroeconomic theory and policy, international financial issues, economic development, international trade, and Colombian and Latin American economic history.